THE NEW ILLINOIS NO SALARY HISTORY LAW: TOP 5 THINGS EMPLOYERS NEED TO KNOW
Under a new law signed by Illinois Gov. J.B. Pritzker on July 31, Illinois companies will soon be prevented from asking job applicants or their previous employers about salary history. The new law amends the Illinois Equal Pay Act by adding prohibitions on employers from asking job applicants for past wages during the hiring process, among other changes.
Here’s what you need to know:
Number 1: When does the No Salary History Law start?
The No Salary History law will go into effect on September 29, 2019.
Number 2: What does the No Salary History Law do?
The new law amends the Equal Pay Act of 2003 and prohibits an employer from:
- screening job applicants based on their wage or salary history, including benefits or other compensation
- requiring that an applicant’s prior wages satisfy minimum or maximum criteria,
- requesting or requiring as a condition of being interviewed or as a condition of continuing to be considered for an offer of employment that an applicant disclose wages or salary history.
- Require that an applicant disclose wage or salary history as a condition of employment.
- Discharge or discriminate against an employee for failing to comply with any wage or salary history request or requirement.
- requiring an employee to sign a contract or waiver that would prohibit the employee from disclosing or discussion information about the employee’s wages, salary, benefits or other compensation.
Number 3: What damages does the No Salary History Law impose for violations?
Workers will be able to seek up to $10,000 in damages if employers violate the law. The law also allows for injunctive relief and provides that the costs and attorney’s fees can be awarded to the impacted employee or candidate. The law allows for recovery of compensatory damages as well, but only to the extent those damages exceed special damages. Claims can be brought up to five years after the date of the violation.
Number 4: What exceptions are there to the No Salary History Law?
The new law does include some exceptions for employers:
- If the job applicant’s wage or salary history is a matter of public record under the Freedom of Information Act or similar law or is contained in a document completed by the job applicant’s current or former employer and then made available to the public by the employer, or submitted or posted by the employer to comply with State or Federal law; or
- The job applicant is a current employee and is applying for a position with the same current employer.
- The job applicant voluntarily and without prompting discloses his or her current or prior wage or salary history, including benefits or other compensation, on the condition that the employer does not consider or rely on the voluntary disclosures as a factor in determining whether to offer a job applicant employment, in making and offer of compensation or in determining future wages, salary benefits, or other compensation.
The law also makes clear that it is not a ban on employers or employment agencies, or an employee from voluntarily providing information about wages, benefits, compensation or salary offered in relation to a position or from engaging in discussions with an applicant for employment about the applicant’s expectations with respect to wage or salary, benefit, and other compensation.
Number 5: What do Employers need to do in the face of the No Salary History Law?
Essentially it is just this simple – do not ask candidates or their previous employers about salary history. But more specifically – Employers need to update their employee handbooks to comply with the law and need to educate the human resources employee, supervisor or similar employee who has access to compensation information on the restrictions contained in the new law.
HISTORY OF THE NO SALARY HISTORY LAW
According to the Chicago Tribune report, Advocates say asking applicants about their salaries at previous jobs helps perpetuate a wage gap between men and women doing the same jobs. Illinois lawmakers passed two previous versions of the legislation, but Pritzker’s predecessor, Republican Gov. Bruce Rauner, vetoed both.
“We are declaring that one’s history should not dictate one’s future, that no person should be held back from earning their true value because of how much money they were paid in a previous job,” Pritzker said during a bill-signing event at Chicago Women’s Park and Gardens in the Prairie District neighborhood on the Near South Side. “It’s no longer acceptable to wring quality work out of capable women at a discounted rate.”
NPR Illinois reports that State Rep. Anna Moeller, a Democrat from Elgin said low salaries often follow people from job to job — especially women. The new law will help break that cycle. “Half of all households are led by a working mother, when her income is depressed, that translates to lower wages for her children and for her family’s,” she said.
Under the measure, prospective employees can self-disclose a previous wage and negotiate wages — but a final salary can only be determined by skill or seniority.
During the signing, Pritzker called out the U.S. Soccer Federation which hasn’t paid four-time World Cup champion U.S. Women’s Soccer Team equal pay.
“Less than a block here sits the headquarters of the United States Soccer Federation, an organization that just this week defended a different kind of decision: to compensate its female players at lower rates than the men despite their substantially higher success rate – an act so questionable that the men’s team itself declared the justification inequitable and unfair,” he said.
“Here in Illinois, we know that women get the job done. It’s time to pay them accordingly.”
Former Republican Gov. Bruce Rauner vetoed the measure twice due to concern the law would hurt businesses.
At least 18 other states have passed similar laws.
Should you have questions regarding the No Salary History Law or other legal needs for your business or would like to schedule a no-charge initial consultation to discuss questions you, please contact Waltz, Palmer & Dawson, LLC at (847) 253-8800 or contact us online.
Waltz, Palmer & Dawson, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Litigation and general Business Law services. Individual services include Estate Planning, Wills and Trusts, Probate, Guardianship, Divorce and Family Law, Collaborative Divorce & Mediation.
This article constitutes attorney advertising. The material is for informational purposes only and does not constitute legal advice.